The single most important question to ask about a target date fund is: "What is its objective?" LifePath is founded on the belief that participants want to avoid negative surprises that can curtail retirement spending.
That's why we manage for three major risks:
Longevity Risk: Outliving Their Money
LifePath is managed to capture long-term growth when the participant's human capital — including future earnings — is highest. It's also designed to continue capturing prudent growth to support them throughout retirement.
Inflation Risk: Eroding Spending Power
LifePath's retirement mix of TIPS and real assets, combined with its 40% equity landing point, is designed to support inflation adjusted spending for 30 years after retirement.
Market Risk: Negative Surprises
LifePath seeks fewer negative surprises, especially as retirement approaches. The importance of this objective was never more evident than following the financial crisis in 2008, when 2010-dated funds experienced extreme losses.